The investment, announced Wednesday, is being made through the UK Space Agency. It will help British aerospace firm Reaction Engines develop a rocket engine that can run at higher power than what is possible today.

The £60 million will be given to the company in two stages: £35 million in 2014/2015, and £25 million in 2015/2016. It will be used to for technical design work, and improving lightweight heat exchanger technology.

Reaction Engines says the heat exchanger, which rapidly cools hot air entering the engine and passed "vital tests" in November 2012, is the first that is light and efficient enough to be used for space travel.

The project has already passed a UK Space Agency technical assessment, Reaction Engines said in a press release, and test flights are planned for 2020. The company says the next phase of development will create about 1,000 engineering and technology jobs, and 2,000 more jobs "in the wider economy."